Tipster Pleads Guilty In Hedge Fund Insider Case

Sep 5 2012 | 10:00am ET

Prosecutors have won yet another guilty plea—and another cooperating witness—in their insider-trading crackdown.

Hyung Lim, a former Altera Corp. executive, admitted yesterday that he passed confidential information to Whittier Trust Co.'s Danny Kuo. Kuo then allegedly passed those tips to three hedge fund employees, including the co-founder of Level Global Investors.

Both Lim and Kuo, who pleaded guilty in April, will testify against Anthony Chiasson, former Diamondback Capital Management portfolio manager Todd Newman and SAC Capital Advisors analyst Jon Horvath. That trial is set to begin on Oct. 29 in New York federal court.

Kim, who was also sued by the Securities and Exchange Commission yesterday, also admitted to passing confidential tips about Nvidia Corp.—the stock at the heart of the case against Chiasson, Newman and Horvath—that he received from a friend in that company's accounting department.

"I knew that Kuo wanted the Nvidia information so that others could trade Nvidia stock," Lim told the court. "In return for providing this information to Kuo, I received cash and other items of value from Kuo, including material nonpublic information concerning other publicly-traded technology companies, which I used to trade on my own account." Kuo also helped pay for Lim's gambling habits, covering his debts and even wiring $5,000 to a Las Vegas casino on one occasion.

Lim allegedly earned or avoided losses of at least $90,000 with those tips. Prosecutors have said that the "criminal club" earned more than $60 million in illegal profits.

Lim, who met Kuo at poker games organized by a mutual friend, pleaded guilty to conspiracy to commit securities and wire fraud. He faces up to 25 years in prison when he is sentenced and remains free on $100,000 bond.


In Depth

Q&A: Omni Macro Fund Bullish On India, Watching China

Mar 4 2015 | 3:35pm ET

Omni Macro Fund was formed in 2007 by Stephen Rosen, previously a prop trader at...

Lifestyle

Hedge Fund Manager Out as Minnesota Wild Minority Owner

Feb 25 2015 | 2:45pm ET

New York hedge fund manager Philip Falcone is no longer a minority owner of the...

Guest Contributor

Risk Management: The Due Diligence Challenge And Branding Opportunity

Mar 2 2015 | 8:41am ET

The hedge fund firms that make it easier for prospective investors to gain comfort...

 

Editor's Note